Canada’s economic relationship with the United States took a sharp hit this weekend, as former U.S. President Donald Trump imposed a wave of harsh new tariffs, prompting alarm from Canadian leaders and experts alike.
“This is bad news,” warned Peter MacKay, Canada’s former foreign affairs minister, during an interview on CTV News Channel. “It’s bad news for the markets. It’s bad news for many sectors on both sides of the border.” MacKay urged swift diplomatic action to contain the fallout, calling for top-level talks between Prime Minister Mark Carney and President Trump to prevent the situation from spiraling further.
On Friday, the White House slapped a 35-per-cent tariff on Canadian goods that it claims violate the Canada-U.S.-Mexico Agreement (CUSMA). The U.S. also introduced a 50-per-cent tariff on semi-finished copper products while maintaining existing tariffs on Canadian steel, aluminum, and automobiles. The administration cited Canada’s alleged non-cooperation in curbing fentanyl imports and retaliatory duties as justification for the measures.
Trade Minister Dominic LeBlanc confirmed that Prime Minister Carney and Trump are expected to speak in the coming days in a renewed attempt to calm escalating tensions. Still, there is no timeline for a deal, and the previously anticipated August 1 breakthrough passed without any progress.
MacKay noted that while 75 per cent of goods moving across the border remain duty-free, the sectors now facing tariffs—steel, copper, aluminum, and autos—are among Canada’s most critical. He emphasized that Trump’s personal approach to diplomacy could complicate negotiations, recalling how past disagreements with former Prime Minister Justin Trudeau devolved into personal attacks with real economic consequences for Canadians.
“This trade war has the potential to become personal once again,” MacKay warned. “And when it does, the Canadian economy pays the price.”
As the dust settles from Trump’s executive order signed late Thursday, there is growing concern that the two countries are drifting into economic uncertainty. MacKay described the current moment as “no man’s land,” adding, “We are not even where we used to be. Let’s just hope that [Trump] doesn’t go wildly off in all directions on the eve of getting to some sort of a finish line.”